ENGINEERING THEME is a falling knife, continues to bleed every investor trying to catch it

Engineering And Construction significantly underperformed today. It increased by +0.43% to close at 1207.83. During the last week it delivered -4.03% and saw a maximum drawdown of -4.44% before bouncing back.

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Monthly Performance

Alpha (outperformance)

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Volatility

Return distribution

~ENGINEERING has been underperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 6 Nov, 2017 to 13 Dec, 2018. Over the last 2 years 11 months and 14 days, ~ENGINEERING underperformed the SP500 index on 49% days. Which indicates that on days ~ENGINEERING underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months ~ENGINEERING was mostly loss making and delivered on average -0.37% per day. It's best return during this period (of +2.81%) was on Tuesday, 16 Oct, 2018. While it's worst loss in the same period (of -4.6%) was on Tuesday, 4 Dec, 2018. The longest stort-term trends during this period were 5 profitable and losing days. The bullish trend (which returned +9.78%) started on 1 Nov, 2018 and went on till 7 Nov, 2018 while the bearish trend (which returned -2.92%) started on 1 Oct, 2018 and went on till 5 Oct, 2018.

The last 12 months saw ~ENGINEERING's investors making profits in 7 months and incurring losses in 5 months. ~ENGINEERING was less consistent in delivering monthly returs than SP500 index. ~ENGINEERING was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -11.25% compared to -7.75% returned by SP500 index in Dec 2018. ~ENGINEERING had a shorter streak of profitable months than SP500 index. It only went up in 3 straight months during the last year. It is interesting to note that both ~ENGINEERING and SP500 index significantly outperform during months when quarterly/annual results are announced.

Money is not the only answer, but it makes a difference. -- Barack Obama

~ENGINEERING is currently seeing overall fall in volatility. In comparison, the SP500 index is seeing increase in volatility. During the last three months, there was a significant surge in ~ENGINEERING's volatility from 19 Sep, 2018 to 12 Nov, 2018. While there was a significant surge in the SP500 index's volatility from 19 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that ~ENGINEERING has positive skewness in it's return distribution. This indicates that investors can expect ~ENGINEERING to make attempts to recover from drawdowns quickly. Which makes ~ENGINEERING a good candidate for momentum based trading on short-term bullish trends or counter-trends.

~ENGINEERING has more chance of extreme outcomes than the SP500 index. Therefore, ~ENGINEERING must receive a lower allocation than SP500 in your portfolio. SP500 index usually has shorter drawdown period than ~ENGINEERING.

Based on your interest in ~ENGINEERING you may find it interesting to know that CCE and OCSI have both performed similar to ~ENGINEERING and can be considered by investors as alternative investment options.

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All content in this article was automatically generated by algorithms. This ensures that there are no human biases in the analysis provided. This approach to investing is not new and has been around for more than three decades. Yet, it has been available to only the most affluent or elite investors leaving individual investors to trade on emotions (such as fear and greed), intuition and poor analysis from third-parties. We want to change this.

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